Membrane bioreactor (MBR) technology is considered a well-established, mature technology with many full-scale plants around the world treating municipal and industrial wastewater. However, membrane fouling and energy consumption still remain serious obstacles and challenges in the wider spread of the MBR technology. Therefore, considerable research and development efforts are still underway. Recent developments are primarily focused on aspects related to energy reduction, fouling control and novel configurations for enhanced process performance. This review addresses the recent work on the above mentioned aspects and it discusses the overall life cycle of MBRs and the market prospects for MBR technology. Novel MBR configurations and integrations with other technologies are also reviewed. Finally, the challenges that need to be addressed in order to facilitate market penetration of MBR technology are highlighted.